Wireless providers looking to profit from public Wi-Fi hotspots may have ordered an extra double mocha latte upon hearing of Verizon's plans to enter the free wireless broadband arena. Some analysts say the phone company's recent announcement that it will offer free public 802.11 access via New York City pay phones is the death of fee-based public hotspots while potentially placing the telecom giant in head-to-head competition with other Wi-Fi services.

Although Verizon has launched in Manhattan just 150 of an eventual 1,000 public payphones converted to Wi-Fi hotspots, analysts say the move will redefine hotspot customers and venues.

Verizon's announcement "kills the consumer Wi-Fi goose," according to Charles Golvin, a Forrester Research analyst. By offering Wi-Fi as part of their broadband service, Verizon is driving the price for consumers down to zero, forcing phone and cable companies to "forgo Wi-Fi access revenues to retain their competitive edge," says Golvin.

Golvin believes the current rag-tag group of companies attempting to eek out profits while serving up Wi-Fi connections to consumers over a cup of designer coffee or a slice of pizza will be replaced by AT&T and Sprint using a wholesaler like Cometa Networks to bundle Wi-Fi access with dial-up services for mobile employees.